Why Panama Is Top of Our List
Date: 01/19/2008
Sunday, Jan. 20, 2008
Read more about retiring overseas in International Living Postcards—Sunday Edition
After a couple of false starts (first, two years ago, when we came close to leaving Paris and Waterford for Panama…then again this past summer, when we nearly became full-time Dubliners), we’re on track again for relocation…to Panama. All indications are that this mission will launch, though I’ve learned from experience to remain open-minded and flexible.
As we (again) work to make plans for a new life in the Hub of the Americas, we’re revisiting our Relocation Checklist.
Panama is perhaps one of the easiest places in the world to establish foreign residency. Legally. In many places, you can work the angles, keep under the radar, and reside unofficially indefinitely. I don’t recommend this, of course, but I’ve known many dozens of people who’ve enjoyed adventures abroad minus the headaches of residency administration this way.
In Panama, ironically, it’s probably more of a challenge today to be an unofficial foreign resident than it is to become a legal one. The visa legislation changes last year mean that you can enter the country as a tourist now for only 30 days…and you can’t count on an extension to your tourist stay. (Although this may change again soon…watch this space.)
On the other hand, once you’ve made the decision that Panama’s the place, you’ve got at least five reasonable choices for how to establish permanent foreign residency there. One requires a pension of at least $500 a month; the others require investments on your part, from $80,000 to $200,000, in various Panamanian financial vehicles, from teak farms to condos.
We went the reforestation route. In return for our investment, we got 1.3 hectares of land planted with teak (titled in our name; this is why we chose the United Nature program over all the others…because it gave us not only the trees, but the land they’re planted on, too)…plus the right to reside full-time in Panama and, after five years of residency, to apply for Panamanian citizenship.
Legal residency…check.
Next on the Relocation Checklist (at least in our household) comes: taxes.
Panama’s tax position is one of its biggest advantages for the foreign resident. Earn no money in Panama…and you owe no taxes in Panama.
Check.
Our daughter attends college in the States…but our 8-year-old is along for the ride. Which means that third on our Relocation Checklist is: schools.
After more than three years in the French school system, Jackson is fluent in the language and comfortable with the approach. We’d like to help him keep his French, and, of course, we’d like to make the move as transparent as possible from his pint-sized perspective.
So we began asking around. Does Panama City have a French school?
Indeed, it has two. I’m in the process of filling out the paperwork to enroll Jack in the École Française de Panama Paul Gauguin. Its teachers and other staff come from France, all instruction is in French (save for Spanish class three times a week), and the curriculum and annual calendar mimic those Jack is familiar with in Paris.
Education…check.
For us, these are the critical questions: How difficult is it to establish and maintain legal residency? How big a tax burden will we acquire as foreign residents? And what are the schooling options for Jackson?
Frankly, it’s a bit embarrassing to admit this to you—the real truth behind how we make some of the most important decisions of our lives. Jack’s education, fair enough…but tax burdens and residency red tape? Should those things be allowed to determine life’s direction?
Lief and I have long debated that question. I’m the romantic…Lief, the realist. I’ve resisted his efforts to give at least as much weight to the practical as I do to the sexy when considering life’s options.
I have to admit, though, that, after a decade of moving our family and our businesses around the globe, I’ve come to appreciate the wisdom in Lief’s position. If you don’t consider it up front and prepare for it with your eyes open, the administration of your new life in paradise can dampen the adventure…maybe drown it.
To be fair, though, we aren’t choosing Panama because it’s an easy place to become a legal foreign resident or because, residing there, our global tax burden will be nicely mitigated. We aren’t even planning our move to Panama City because of its Paul Gauguin French school.
Those things have been critical in our final decision-making. But they aren’t what attracted us to the country in the first place. We like Panama for the weather (on the coast and in the mountains…Panama City can be too hot and too humid), and for its beauty (again, especially along its Pacific coast and in the highlands). Jack likes its sun and sand. I appreciate its history and colonial architecture in Casco Viejo. Lief is fond of its geographic position, which will greatly reduce his number of hours in the air. We all enjoy its spicy Latin culture.
Panama’s many charms caught our eye…so we ran it through our filter—our personalized Family Relocation Checklist. Check, check, check, and we’re on our way.
Not that we’re naïve enough to believe the work is done. We’ve been down this path often enough now to realize that the heavy lifting of this relocation is still to come. We need a place to live, an office for Lief, a car, a driver (I don’t think I’m ready to brave Panama City traffic)… We’ll spend the next six months researching, visiting, and scouting.
But we’ve learned not to invest time looking at houses to buy or apartments to rent…viewing office space for lease…or investigating shipping options or insurance premiums…until the three big questions on our Family Checklist have been answered in the affirmative.
Your list will differ from ours, of course, but the point is to make it. Do the hard work of identifying the two or three or four most critical agendas in your life. Children? Health care? Business concerns? Cost of living? Language?
What few key boxes must a would-be paradise abroad check for you?
Kathleen Peddicord
Publisher Emeritus, International Living
P.S. Don’t dismiss language as a potential key concern. In our household, we’ve divided the labor on this front. I speak French (at least enough to get by)…and Lief speaks Spanish. I fear that one reason he’s looking forward to our new life in Spanish-speaking Panama is that, there, he’ll have daily chances to correct my pathetic attempts at communicating in Spanish…the way (I have to admit) I’ve teased him about his (he’d have to admit) crazy French for the past three years.
Read related articles:
- The Return of Panama's 20-Year Property Tax Exemption
- IL Retirees Get Cheap Flights to Panama
- Choose Your Ideal Retirement
- Learning Spanish: The Basics
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